#436 Leadership in Times of Crisis: Restructuring and Redundancies Demand Accountability - Article by Niels Brabandt
Leadership in Times of Crisis: Restructuring and Redundancies Demand Accountability
By Niels Brabandt
Crises test leadership in ways no quarterly report or strategy retreat can. Economic downturns, restructuring, and redundancies force executives to confront the most difficult responsibilities of their role: telling people their jobs are gone, preserving organisational trust, and ensuring that the company emerges intact. In a recent episode of my leadership podcast, I explored how leaders must navigate these moments because when they fail, the costs extend far beyond the balance sheet.
The Accountability of Decisions
When companies cite “the economy” or “the market” as the reason for layoffs, they often discover that such explanations are insufficient. As I stressed, no leader would accept “the market isn’t there” as a sales excuse; nor should employees accept vague justifications for losing their livelihood. Leaders owe specificity and clarity—whether it is tariffs reducing exports by 22 per cent or profit margins falling nearly 50 per cent. Without clear reasoning, redundancies are perceived as arbitrary, and leaders lose credibility.
Just as critical is how leaders communicate decisions. Blaming “someone up in the ivory tower” not only undermines trust but also exposes leaders as evasive. Authentic leadership means owning the decision and being prepared to defend it.
Case Studies in Mismanagement
The risks of mishandling redundancies are not theoretical. At ANZ, one of Australia’s largest banks, an automated email was mistakenly sent before an official announcement, informing employees that they had been terminated. The error went viral, damaging trust and morale overnight. Even with an apology, the cultural damage was profound: employees began fearing each morning’s inbox.
Other organisations have fared no better. Some have laid off staff without severance or support, only to face public backlash on LinkedIn and Instagram. In one Swiss case, a senior finance executive took his own life after being pushed beyond breaking point, prompting the CEO’s resignation and irreparable reputational harm. These examples underscore a hard truth: mishandled layoffs do not just hurt individuals, they can destabilise entire organisations.
Preparation on Three Levels
Effective leadership in crisis requires preparation on three levels:
Organisational Infrastructure: Processes and technical safeguards must be robust. An automated email error should never traumatise staff. Large corporations, in particular, must align HR and legal teams to design redundancy processes that are transparent, compliant, and humane.
Support Systems: Employees expect, and deserve, more than platitudes. Support may include counselling, career coaching, retraining, extended pay, or severance packages. Volkswagen, for example, has long offered early retirement and six-figure packages rather than abrupt dismissals. Contrast that with firms that offer nothing, only to see talent pipelines collapse as prospective hires withdraw in protest.
Leadership Training: No manager should conduct an exit interview unprepared. Leaders must be trained to communicate with clarity, empathy, and professionalism. As I recalled from my own early career, even with coaching and legal oversight, delivering a redundancy was a sleepless-night ordeal. Without proper training, leaders risk making mistakes that can harm both individuals and their organisations' brands.
Communication and Timing
Professional communication is non-negotiable. Redundancies must be delivered in person whenever possible, never via mass emails or prerecorded videos. The sequence matters: inform the individual, then the team, then the organisation, and only then the public.
Timing also matters. One organisation infamously dismissed an employee on the day of his 30th anniversary with the company. Expecting recognition, he instead received termination. His story spread across platforms within hours, leading to a collapse in recruitment for more than a year. A poor decision in timing can undo decades of brand-building.
Ethical and Strategic Imperatives
The human consequences of layoffs extend beyond individual careers; they also impact families, communities, and mental health. Leaders who dismiss these impacts risk moral failure and brand catastrophe. At the same time, redundancies handled poorly create a “triple damage”: personal brand erosion, employer brand decline, and ethical condemnation.
Leadership in crisis demands clarity, empathy, and accountability. Decisions must be justified, support must be provided, and communication must be handled with the utmost professionalism. Anything less risks transforming a financial adjustment into a reputational and human tragedy.
In my work as Niels Brabandt, founder of NB Networks and a global expert on sustainable leadership, I emphasise that crises are not moments to abdicate responsibility—they are the defining tests of leadership. Organisations that prepare, communicate clearly, and uphold dignity will not only survive restructuring but also emerge stronger. Those that do not will find the damage, both cultural and reputational, and the human costs far harder to repair.
Niels Brabandt
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More on this topic in this week's videocast and podcast with Niels Brabandt: Videocast / Apple Podcasts / Spotify
For the videocast’s and podcast’s transcript, read below this article.
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Niels Brabandt is an expert in sustainable leadership with more than 20 years of experience in practice and science.
Niels Brabandt: Professional Training, Speaking, Coaching, Consulting, Mentoring, Project & Interim Management. Event host, MC, moderator.
Podcast Transcript
Niels Brabandt
Times of crisis and leadership, you probably now think, well, we have a bit of a tough situation at the moment in the market and maybe the economy isn't too strong and yes, that leads to certain tough decisions. And I received quite a number of emails of people thinking, how should I actually react? How should I react when things go wrong? And that's exactly the topic we're going to talk about today. We talk about leadership when we have times of crisis, when we have times of restructuring and we have times of redundancies, because all of now apply. And very important, I'm going to give you a real world case this time. Again, I am going to quote this, and this is always possible under the Fair Use act, just as a disclaimer under UK and US law and of course the TRX quotation right under German law.
So when we talk about leadership in times of crisis, a very important point is that when you have certain cases and you say, well, maybe my organization's affected, we had to let people go. And, you know, the economy, the market, number one, when we talk about cases and you say the economy, it is never a good point to be made. When you tell people it is the economy, they will simply say, could you please be more specific? And then you're suddenly standing there, not being sure what to say and saying, you know, it's the market, the market just isn't there. Just to let you know, when one of your salespeople comes along and says the market just isn't there, you would never allow them to get away with that. And by the way, rightfully so. Sales is there to get products placed and purchased on the other side, where they probably said no in the first place, and then convince them to get to a yes, that's the sales job.
And when suddenly they say the market just isn't there, you simply would say, it's your job to find the spot in the market, so please go for it. And now they can do the same. When you, for example, say we have tariffs, tariffs that didn't exist five years ago and we thought we get along, but now we see after all these tariffs implemented and we export to the US, our sales is going down by 22%, our profit margin is down by 48%, and we simply have to take preemptive measures so we don't put the organisation in danger. And of course people will never be happy to be laid off, to be made redundant, to have to leave their employment or not have their contracts extended. However, as long as you give a reason, people will at Least understand why you made the decision. Always be aware when you make a decision as a leader, you are accountable. How this decision is going to be communicated.
It's very important that you do not say, oh, someone up there, you know, in their ivory tower, they decided something. I think it's nonsense. You think it's nonsense.
All nonsense, right? We just sit here and have to do it. That is a really bad way, how to lead people, because you just try to be the charming person, talking down on others. And as soon as this will make the round, and it always will, you will claim towards higher levels of leadership, more senior executives. You will say, I never said that. I never said that. You know, these difficult employees, they just make things up.
I never said that. And that makes you a lie on all ends. So be sure that when you make decisions, you are ready to defend your decisions because people can expect you to give them a reason. And when things go really wrong, and let's face it, sooner or later something will go wrong.
There's the case of Anz. I don't know if you heard of that Anz, let's just assume you go to the office in the morning and suddenly you have an email. And the email says, please return your laptop by Friday. And you think, why should I? And you keep on reading the email and suddenly in the email you find out that you will be fired. No communication before, no meeting before, no statements before, nothing told to you before, nothing, zilch, zero, nada, niente. And suddenly you find out via email you are fired.
And when you think now, well, that probably will not happen, that is just too bad. It happened, it happened to Anz, one of Australia's New Zealand's largest banks.
It is a coincidence. No, it is an error that happened here. It's an automated email which was meant to be sent after the announcement, but someone mixed up dates and suddenly it was sent out before the announcement and it immediately went viral, immediately went to the general public and immediately of course was condemned.
Rightfully so, of course. At least. And that's the good thing we have to say about Anz. There was an unreserved apology and now there's an offer of counselling due to the psychological damage made. However, of course you can just probably assume what the atmosphere in the office will be like when you go to that organization's workplace in the morning. And you always think, when I open my email inbox, hopefully I do not get one of these emails. Because you never know it happened before.
So when you have such cases, you need to Be prepared better. And I'm always quite shocked how badly prepared many people are and many organisations are when it comes to these moments. Because let's face it, as soon as you see tariffs coming, as soon as you see an economy dip, this is not coming out of the blue. There are very few moments. And of course they always say, remember when we had the 2001 terror attacks and the 2008 banking crisis and when we had the COVID lockdowns.
Yes, the COVID lockdowns. You probably didn't expect to see a full lockdown in your history or your life. Neither did I. And the 2001 terror attacks we probably didn't see coming. The 2008 banking crisis, was that not foreseeable? Depends on in which industry you are. It didn't happen overnight. Surprise, surprise.
You need to be prepared on three levels. And these are always the same three levels. It always starts with the organisation. First, of course, you need to define processes, how to lay off people, what do you do in case of redundancies. And that is really a 101 basic level. And many organisations have these processes. However, when you see. Because technicalities.
Technicalities means how you put things into place. Simply, how do you, for example, put in a date when the automated email should be sent and how many people should take a look on this email and how many people should take a look when this should be sent? Maybe more than one person. And it looks a bit like in this case we had with Anz, only one person set up this email and said, yeah, maybe I mixed up some months here.
Sorry for that, I just traumatised 100 people. Technicalities. When you see that international corporations fail on technicalities, you suddenly have many question marks. Which other steps in this organisation might not be up to date? Technicalities should not be an issue because when you fail on the technicality side, people of course lose trust in you because they think when that already is an issue here. What about anything else we do here? So the technicalities need to be set up.
That's pretty much 101 standard, 101 level of education. So when you have processes and you have the technicalities, always speak to hr, always speak to legal. How do you want to communicate and how do you want to put this into place? And very important here you have to offer support and that is now heavily depending on what kind of organisation you are. Let's say you are an organisation where eight people are working and you have to lay someone off due to. Due to economical reasons because you lost a Major client. Anyone will understand when you say we lost that major client due to, for example, tariffs, you give reasoning and that's why I have to lay someone off.
And that is, unfortunately, you. I have to make you redundant. Anyone will understand. They will not be happy and they will also not expect you to put up a massive support package because you're a tiny company, where should it come from? The money just isn't there. But when you are a massive organisation, when you have hundreds or thousands of people on staff and you make people redundant, a support package needs to be made and the support package should be more than. Yeah, you can, you can always call me, right, or send me an email and I will forward that email to legal and then you get the automated answer out of the system.
So, yeah, that's the support. No, that's not the support you need to offer proper support system. And support systems can be anything from counselling to any kind of coaching, additional qualifications, any kind of ongoing payment, any kind of bonuses, any kind of fee. You get to leave the organisation. I give you just very simple aspect here. Volkswagen. Volkswagen, you know, one of the largest car manufacturers in Germany had to downsize and they didn't fire people by just saying, off you go.
Because the unions, by the way, would never allow that to happen. And also, of course, the consequence of that could be unforeseeable. What they did now, they create packages for people to leave. Either some people retire and there will be no new hire, or some people will be offered to retire early and you close the gap in the pension system, or you simply offer people money to leave the organisation. Another car manufacturer, it's happening in my circle of friends, is offering a significant amount of money massively in the six digits. Not a one, not a two is the first number here. So massive six digits to leave the job.
So what you get when you say you are leaving and you take that package, then you get 10 months of garden leave. For the people who don't know what the term is, garden leave means you get full pay and you just sit in your garden. So you get full pay for the next 10 months plus the six digit amount of money. That is quite some money which you can get along with and you probably have some savings. So you are safe for probably the next years coming up, even if you don't find a job immediately. So be sure that the support system is in place as quickly as possible. So this support system needs to be there.
The larger the organisation is, the larger the support system needs to be. And I know that sometimes there are people who say, no, I just don't see that, don't want to spend the money. You know, we just make people leave. So first, of course, it will be a massive online catastrophe. I mean, just the case of Anz immediately went viral. I give you another case in, In Mice, in my circle of contacts, where they laid someone off with absolutely no bonus package. And that person went on the Internet and immediately, immediately this went viral on LinkedIn, on Instagram.
And the HR reported later that ongoing, ongoing discussions on employment on other positions where people revoked their application, where they said, I see how you deal with people, not with me. I don't see that you are a value driven organisation, at least not with values I can live with. So thank you very much, it's not you. So you will have a massive, massive damage. The worst case scenario, of course, besides, everything is inhumane, unethical, immoral, What I just said, when it goes wrong, the worst point is always when someone harms themselves. Maybe you saw the movie up in the Air with George Clooney where they dealt with exactly that. Someone, during an exit interview says, if you, if you fire me, I'm going to go home and jump off a bridge.
And that's exactly what the person did afterwards. And this will immediately be held against you. There was even one major Swiss CFO who a couple of years ago jumped off his house and he said, due to the psychological pressure that one CEO put upon him, he developed a psychological disorder due to the stress, didn't get any help, there was no support, it went and then jumped off his bridge, sorry, jumped off his house and killed himself. And immediately the CEO had to resign, of course. And immediately the organisation carried away massive damage from that. So be sure that your support system is in place. No support system in place.
It is a ticking time bomb. And when you say it worked in the past, well, things that worked in the past doesn't mean that it had to work in the future. It has to work in the future. Be sure that a support system is in place. The larger the organisation, the larger the support system needs to be. And after you prepare the organisation, you have to prepare leaders. It's absurd to believe that leaders can do exit interviews just by their nature, because they are, and I quote, good with people.
Our leader is so good with people. You know, it's a people, person, people, people and the people with the people with the people's people, people. Exit interview, please leave. You see, this is not working. So leaders need to be professionally prepared, training, coaching, whatever you do. I remember vividly when I had my first exit interview to deliver to someone. Didn't sleep the whole night.
I was professionally prepared with a trainer, with a coach, with a legal professional, with someone sitting there with my boss, being there for the first, for the very first exit interview, giving me tips and hints afterwards, and being there for anything going wrong, fortunately didn't go wrong. So the preparation needs to be there because accountability needs to be taken. Anyone wants to know what is your share of this? Because one thing that can happen, and it will happen, is when you say, you know, we have tariffs, we can't sell our goods anymore, that's why we have to downsize. You're one of the people being made redundant. And then you offer the support system, hopefully. And then when people say, look, when we have to make people redundant, may I ask how many managers are removed or how many supervisors or how many executives?
And by the way, you still fly business class. Why? We want to save money, I thought. And we just last week ordered really expensive new company cars.
How did that happen? When we have to save money? And of course the company car argument is only reasonable when they were just recently purchased. When you already have company cars for a year, then of course you cannot just throw them away or give them back without facing another massive loss. But when you have new cars, you can't have luxury cars in week one and then lay off people in week two. When people see that you hold no share in the accountability on the matter, people will very quickly say that you are part of the problem and not part of the solution. When you lack the empathy.
And we all know there's a difference between empathy, really feeling it, and empathic behaviour, where you know what to say in the right moment, the empathy you have or don't have. But the empathic behaviour can be learned, the empathic behaviour can be learned. The clarity you need to deliver always means when the decision is made, the burden of proof is with you. You cannot blame the ivory tower or someone else, or you were forced to say that people, blah, blah, blah, yada, yada, yada, not possible. And again, you have to offer support. And that's why you as a leader have to clarify what kind of support system can I offer? Because when you say, I'm struggling with the situation, I already can't sleep at home, I already can't sleep at night, I think everything's going down the drain.
I am already suffering psychologically. You're probably not the person who can offer support by yourself. So what is the support system, then be sure to offer one. So when you have the organisation and the leaders prepared, then you have to deal with how to professionally communicate. This and very important is exit interviews, if anyhow possible, are always done on site in person. The exception of course, is when you have people who work for you online, meaning remote work all the time. When you have people who never come to the office, they will have full understanding that this talk needs to happen online as well.
Not great, but not changeable. When you have people who live two, three, four countries away and there's a 12 hour travel, you don't want to make people travel 12 hours to say, by the way, you just lost your job and now have a safe trip home. That is not what you want to do. So always communicate in person. By the way, never do anything with mass events or never do anything with recorded videos, never put all the people in one hall and then say, look all of you, you're fired. Sorry for that, but good luck. You can still Google the one CEO who laid off hundreds of people in his organisation via a recorded video where he said he's so, so sorry, but he has to do it and the whole company fell apart.
So you always have to inform people in person, on site if possible, when they are remote workers, you do it with your zoom teams, whatever tool you use and the order in which you inform. And by the way, we don't want to have the situation of sending people emails that go viral before you even told them. The order of informing people is first the person gets to know, then the team gets to know, then the whole organisation gets to know. And then, and only if needed, the fourth one here, the general public needs to know. When you are a mid sized business, you have absolutely no obligation to justify anything to the outside world. You do your thing, they never cared about you in the first place. As soon as you have people laid off, suddenly the local newspaper shows up and say, give us reasoning.
No, you don't have to. You can do that. And of course having professional PR people here helps, but you don't have to. However, when you are an organisation where people say, let's say you are Siemens or you are General Electric, or you are Airbus or Boeing, you are a massive organisation.
For example Volkswagen. Absolutely crucial employer for the city of Volkswagen. If Volkswagen shuts down, Wolfsburg disappears from the map. Pretty much there are more people working at Volkswagen in total than there are people living in Wolfsburg. That's the city where the headquarters is and where the company and the production plants, the sites are Located. So when you downsize, it will have an impact on the infrastructure, it will have an impact on restaurant, it will have an impact on hotels, it will have an impact on maybe tourism or visitors. Anything there will suffer from your downsizing.
When your organisation is so crucial to the local infrastructure, then be sure that you inform properly. When the general public has a vested interest, a reasonable interest, a vested interest in you, you need to satisfy that, you need to deal with that even if you like, even if you don't like it. Because when people see, look, when you shut down here, and I can tell you from my personal history, I grew up in Hamburg, northern Germany, but then that's where I was born, but then grew up in a small, reasonably small village in the suburbs of Hamburg. And I saw another smaller cities and suburbs, don't want to call them villages, but they're quite close to that. When suddenly locations of the army shut down there, basically the whole city collapsed. And they were openly communicating that two years in advance. They said, in two years time the US army will leave this location, prepare accordingly.
And they tried their best to communicate it properly and they did it well, by the way. And the city tried to do as much as they could, but still we. When suddenly one third of your inhabitants are gone, then simply you cannot catch up with that very quickly. Restaurants close, cinemas close, schools will close down, et cetera, et cetera, yada, yada, and so on and so forth. So the general public needs to know as soon as your company is critical to the local infrastructure. That is a crucial point here and now, of course the main question is how do I get all of this implemented in my organisation? And of course when you implement this, the number one is always the number step, number one is always tell people how to do professional exit interviews.
I am absolutely astonished of how many people did exit interviews without ever having any personal training here. So first, of course you need to have personal training, training, coaching, whatever it is, you need to deliver full transparency on the matter. You need to give reasoning. And by the way, there is a good timing or a bad timing. I give you a reason, I give you an example which, which couldn't go wrong more. I mean, anyone knows you don't do it before end of the year or Christmas, you don't do it probably before Easter or before the main holidays. However, one person was called into the office and said, and was told, you are fired due to economical reasons.
And then the person said, and you do that to me on this day. And then the leader said, well, what do you mean with that day, there's no major vacation, there's no public holiday, it's not Easter, it's not, not any crucial other holiday, nothing other religious holiday. There's no end of year thing, it's not your birthday. What do you mean with this day? And here we come to the point of unlucky coincidences because they looked up if it's his birthday and everything and they said, okay, this is the good timing. And then they said, we really don't know what you're talking about. And then he said, Today is my 30 year anniversary in this company.
I thought I got called to the CEO. And by the way, that was the reason why he was of such good mood when he was invited to the owner's office, the person who ran the business. And then he continued to say, look, I expected to get a present, a thank you note, maybe gift or anything. And that is what you do on my 30th anniversary. Okay, I will note that note taken factually and emotionally. He left the office, went home, went online, Facebook, Instagram, YouTube video, the full lot, Glassdoor, Kununu everywhere. And immediately, massive outreach within hours.
The HR of that is still a pretty local business. Said half of the people applying for other jobs in that business revoked their application. And especially the best talents revoke their applications due to seeing this. They struggled for a year and a half to get talents into the organisation because it went viral so badly. And that's exactly what I'm talking about. When you think that all of that is not for you, you don't need the personal talk, you do it via email, which by the way, in many countries isn't even legally allowed or legally binding then and you say you don't need the training, you don't need anything of that. You inform them as you like with a recorded video, whatever it is, then things will go down very quickly.
You have to put your ego behind. It's not about you, it's never about you, by the way. So there is good and bad timing, by the way, when it comes to language, the language always needs to be specific. What is the reason why I do not continue to work here? And sometimes you simply can say, look, you worked here, we just expected that. When you work in production here, you produce roughly 50 pieces a day. You're now here for four months.
You have probation time of six months. And after four months and you say you are fully onboarded, you say everything's great, you love everything here, but you produce 12 pieces, sometimes 18 per day. We don't see that in two month time this is going anywhere near what we expect. Others produce 50, you produce 12 to 18. So that's why we end the employment. And sometimes people are very sad and people are sometimes begging and it can be extremely emotional. There are always offer support, however, break the news, tell them exactly what's going on and then from offering support and end the discussion there.
Because you can of course not do psychological counselling on site also you will be the wrong person to do that in this case. So offer people, especially the leaders, awareness and training. No one can do a good exit interview off the cuff. There's absolutely no chance. And by the way, I can't, I, I can't stress this often enough. The $49 online class with people should watch during the lunch break is not going to make the cut. People need professional training, coaching, whatever it is, anything else is not going to happen.
And by the way, always keep in mind when you mess things up, there is the triple damage. Of course you can say there's a damage to the employer brand, yes, and there is, but the main damage is your personal brand. People will always say, you said that, you did that to me, you messed up, you are the one. They will connect that with your name until the end of all days. And when you are unlucky, they go on the Internet with that. So personal brand damage, employer brand damage. And always remember and that is a very strong ethical and moral point of view.
Of course also you have massive impact on people's lives here. You can ruin whole existences and life plans. Some people are in an organisation for 22 years and they think they will stay there for the rest of their lives because they love it, they love to work with the people, they love their job, they want to do whatever they did and suddenly there's a new tech there and their job just isn't available anymore. Or simply industries change and what they do is just not done in the country where they reside anymore. Or suddenly there's something like Brexit and organisations just move away and open production sites in different countries. So that is something where you have massive impact on the lives of people. You can, you, you, you can ruin people's lives.
And of course you will say that's not your fault. We know that it's not your fault. However, the communication here is key because very quickly you can miss out on something. And when you miss out on something, people will very quickly say, look, this is how it goes. Management executives line their own pockets and everything goes against the working person in this organisation. I think I discussed that online very quickly. And by the way, including your name, personal brand, employer brand, and the impact with a strong ethical and moral implication as well.
Be sure that you align everything we said here according to what we said here because then even in times of crisis, leadership will perform well and I wish you all the best doing so. And when you now say, whoa, that sounds like a lot of work. Or maybe you say I have two to 37 questions, then feel free to reach out. Feel free to reach out. So first, of course when you look at this, when you're now watching me on YouTube, feel free to put a like there, subscribe and leave a comment there. And of course you can when you now listen on Apple Podcasts or Spotify, leave a review, leave 5 stars. Thank you very much for doing so.
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